Microsoft: Rivals' Royalty Fees Are Fair

European Union regulators want Microsoft Corp. to give rivals access -- at
little or no cost -- to information that would help their products work better
with Windows, according to a published report Thursday. But the software maker
says its current charges are fair and the EU has not provided clear guidance
on what fair pricing would be.

"We believe we are in full compliance with the March 2004 decision and
that the terms on which we have made the protocols available are reasonable
and nondiscriminatory," Microsoft spokesman Tom Brookes said Thursday.
He said the company did not receive clear guidance from the EU's commission
on what fair pricing would be.

The Financial Times cited a confidential document the commission sent to Microsoft
on March 1 and said the EU was asking the company to set little or no license
fee for information it must share with rivals as part of a March 2004 antitrust
order. The software information must allow competitors to produce server software
that works smoothly with Windows.

The newspaper quoted a statement from Neil Barrett, the computer science professor
monitoring Microsoft's compliance, arguing that even a 1 percent royalty rate
would be unacceptable to licensees and no fee would be better.

When contacted, the commission said it had no comment on the report.

Microsoft's license program sets a maximum 5.95 percent royalty rate for products
that use its server protocols. The company said it believes the prices it has
set are fair to reflect the code's "considerable innovations."

"The commission is asking us to license the technology to our competitors
for free," said Microsoft spokesman Jack Evans from Seattle.

The EU executive disagreed on March 1 when it said there was "no significant
innovation" in the requested information Microsoft had to provide rivals
-- and therefore Microsoft did not have the right to charge high fees for licenses.

It gave the company until April 23 to respond to the charges, threatening to
start levying daily fines of 3 million euros ($4 million) a day after that.
Microsoft can ask for a hearing to plea its case before the EU decides to set
fines.